The Mount Polley mine resumed normal operations in June 2016, following receipt of authorizations from the Ministry of Energy, Mines & Petroleum Resources (MEM) and the Ministry of Environment and Climate Change Strategy (ENV). To date, significant progress has been made with our remediation of the areas impacted by the 2014 Mount Polley Breach. Research and monitoring has observed rapid recovery of the impacted environment. Remediation and monitoring of these areas is ongoing.

MPMC had been operating under a short-term water management plan in effect since November 30, 2015. In October 2016, MPMC submitted its long-term water management plan permit amendment application to ENV. Formal approval of the long-term water management plan received by MPMC on April 7, 2017, following five months of extensive public consultation with First Nations and local communities. The application also underwent a full technical review from the Cariboo Mine Development Review Committee which includes representatives from provincial and federal agencies, First Nations, local governments (City of Williams Lake and Cariboo Regional District), and the community of Likely.

Chronology of Mount Polley Mine Tailings Storage Facility Breach

August 4, 2014 - A breach of the tailings storage facility (TSF) occurred at the Mount Polley mine (Mount Polley Breach) on August 4, 2014 causing water and tailings to be released. Emergency protocol procedures were immediately enacted. The mill was shut down and placed on care and maintenance status.

The estimated summary of materials released or displaced by the Mount Polley Breach:

supernatant water 10.6M m3

tailings slurry: tailings solids 7.3M m3; interstitial water 6.5M m3

construction materials 0.6M m3

Pollution Abatement Order No. 107461 was issued to Mount Polley Mining Corporation (MPMC) by the Province of British Columbia on August 5, requiring MPMC provide documentation describing its response, and provide communications to the Ministry of Environment and Climate Change Strategy (ENV) regarding response progress. A Conceptual Interim Erosion and Sediment Control Plan (the Plan) for mitigating ongoing erosion and sediment transport within impacted areas downstream of the breach was submitted by MPMC. Specific objectives of the Plan were :

provide water management structures to improve the quality of water flowing into Quesnel Lake

reduce potential for re-mobilization of tailings and sediments deposited or exposed by the Mount Polley Breach

minimize and control water flows from the TSF and re-direct these flows to the Springer pit

Overview of Area Affected by the Mount Polley Breach

Three high priority areas were identified where in-stream controls were planned to mitigate potential future erosion and/or sediment transport:

within and down-gradient of the TSF

where the water pumped from Polley Lake was transferred into Hazeltine Creek

up-stream of the mouth of Hazeltine Creek, prior to draining into Quesnel Lake

Rock berms were constructed upstream of the breach area to secure the remaining tailings in the TSF and to collect surface water. Repair of the breach to prevent any release of tailings with the spring runoff was completed in 2Q2015. The water level of Polly Lake rose 1.7 metres when a portion of the water from the breach became trapped by a plug of material at the outlet to the lake. The water was pumped out of Polley Lake and into Hazeltine Creek. The outlet of Polley Lake was subsequently restored to reconnect Polley Lake to Hazeltine Creek.

Best Management Practices were implemented over the remaining areas of impact to reduce potential for erosion of and sediment migration from Hazeltine Creek. The Plan was implemented in cooperation with the ENV, subject to completing ongoing designs and site inspections to confirm details and design standards.

Rehabilitation of Hazeltine Creek included reconstruction of the channel, and restoration of riparian habitat along the creek banks. A set of sedimentation ponds were constructed in the lower reaches of Hazeltine Creek to remove suspended solids from the water before entering into Quesnel Lake. An ongoing revegetation program will reestablish a productive ecosystem, and for water management in order to control sedimentation. The rehabilitation also includes the establishment of spawning and rearing habitat for fish.

Rehabilitation plans normally take shape after sources and discharges are controlled, and after an assessment of impacts has been done. MPMC provides the community and local First Nations with ongoing updates on the progress of the rehabilitation. The rehabilitation strategy is subject to change and will be updated from time to time.

August 2014 - The Government of British Columbia, in conjunction with the Soda Creek Indian Band (Xats’ull First Nation) and Williams Lake Indian (T’exelcemc) Band, ordered an independent expert engineering investigation and review into the Mount Polley Breach to determine the root cause. The geotechnical work program in support of the review included mapping, geophysical surveys, drilling and test pitting.

January 2015 - The Independent Expert Engineering Investigation and Review Panel issued their report (the Report). The Report stated no evidence of failure was found due to human intervention, overtopping, or piping and/or cracking resulting in internal erosion. The water accumulation within the TSF was not a cause of failure but did contribute to the release of tailings. The Report concluded the perimeter embankment of the TSF failed because a glacio-lacustrine layer lying approximately 8 metres below the base of the dam in the area of the breach was not as strong as had been assumed in the design of the TSF. The Report noted the omissions associated with site characterizations remained undetected, notwithstanding the large number of experienced geotechnical engineers associated with the TSF over the years.

June 2015 - Golder Associates completed a Post Event Environmental Impact Assessment Report which provided an assessment of the physical, chemical and biological impacts immediately following the Mount Polley Breach, and in the first 6-8 months following. The assessment of any long term impacts will continue, and results will be updated on a regular basis.

The mine has a surplus water balance, which means the amount of water impacting the mine site as precipitation exceeds the amount of water consumed in processing (when mine is operating) or water that leaves the site by evaporation. Precipitation at the mine area averages 5.9 million cubic metres annually, and up to 9.3 million cubic metres during a 1-in-200 wet year weather event. This amount of water must be handled, treated, and discharged to maintain a neutral water balance.

MPMC worked with the regulators and First Nations to develop an effective long term water management plan for the mine site to manage, treat, and dispose of mine water through to mine closure, to ensure the protection of human health and the environment. A short term water discharge permit was issued in November 2015, which included the construction of a water discharge plant.

Environmental monitoring and data collection includes water chemistry at sampling stations in Quesnel Lake, Polley Lake, Hazeltine Creek and the Quesnel River. The monitoring program also includes geochemical, physical limnology and biological testing. Water sampling has concluded affected areas were not toxic to aquatic life. Water quality information has been communicated to the local community and stakeholders on a regular basis.

July 2015 - MPMC received regulatory approvals from the Ministry of Energy, Mines & Petroleum Resources (MEM) and ENV authorizing restart of mine operations under a modified operating plan. With the TSF not authorized for continued mill process tailings deposition at the time, the modified operating plan included use of the Springer pit for tailings deposition.

August 2015 - Mine operations resume. Mill processing on a one-week-on/one-week-off schedule, and ore feed sourced from the Cariboo pit and the Boundary zone underground operation. In late November 2015, due to the complexity of operating the mill under winter conditions and considering weakened commodity prices, the mill transitioned into operating on a continuous basis.

December 2015 – The Chief Inspector of Mines for the Province of British Columbia released his report on the Mount Polley Breach. The report concluded, as had the Independent Expert Engineering and Investigation Review Panel report, that the root cause of the Mount Polley Breach was associated with an engineering design that had not properly characterized the strength of a clay (glaciolacustrine) unit in the native soil foundation.

March 2016 – A permit application for resumption of normal mine operations and restated use of the TSF was filed. A public review was part of the application process.

June 2016 - MPMC received regulatory approvals authorizing the mine to return to normal operations, including use of the repaired TSF. The current authorized mine plan includes mining of the Phase 4 Cariboo-Springer pit over a period of approximately five years. Rehabilitation work at the TSF and areas affected by the Mount Polley Breach continues through all phases of operations.

October 2016 - MPMC submitted its formal long-term water management plan permit amendment application and supporting Technical Assessment Report. The documents were subject to extensive public consultation, including First Nations and local communities. The application also underwent a full technical review from the Cariboo Mine Development Review Committee (CMDRC) which includes representatives from provincial and federal agencies, First Nations, local governments (City of Williams Lake and Cariboo Regional District), and the community of Likely.

April 2017 - MPMC received approval of its long-term water management plan for the Mount Polley mine site from an independent statutory-decision maker from the ENV. We expect the long-term water management plan to be fully in place by fall 2017 and will replace the short-term water management plan that has been in place since November 30, 2015.

Current Environmental Monitoring

Environmental monitoring programs, which include monitoring of groundwater, surface water (streams, lakes, and mine contact water collection sites), weather, and hydrological conditions, continue as required under authorizations from the ENV and the MEM. Annual Environmental and Reclamation Reports, submitted to the ENV and MEM, outline all current and planned mining and reclamation activities, as well as environmental monitoring activities and results.

Environmental Research

MPMC is actively engaged in research projects with academic partners to refine site reclamation and closure methods, as well as to contribute to improving industry best practices. At the time of the Mount Polley Breach, MPMC was in the first year of a partnership with Thompson Rivers University (TRU) to develop a wetland passive treatment research project at the ABR outflow. After the Mount Polley Breach, MPMC and TRU leveraged existing grants from the Natural Sciences and Engineering Research Council of Canada (NSERC) and non-profit, national research organization, Mitacs, to obtain additional funding from Genome BC and Genome Canada in order to adapt the research project and use metagenomics to study passive remediation of disturbed areas and tailings material downstream of the Mount Polley Breach. The initial phase of this project will be completed in 2017, although longer-term research potential exists using the baseline data that were collected and the bio-augmentation plots that were installed. In 2016, a new partnership was initiated with UBC, with support from NSERC, to support Mount Polley Breach rehabilitation works. Specifically, research is being conducted into methods for rehabilitating soil biological communities in order to improve nutrient cycling and build soil, with the objective of improving revegetation success.